I hope for more options like these from other mutual fund companies, since so many of the currently available asian market funds have holdings in the Chinese companies contributing to the horror in Darfur.

And I think you are right about fees with one caveat–the very useful shareholder advocacy that the SRI funds do also costs money.

Thanks for your comment.

AS FAR AS FEES ARE CONCERNED ITS UNFORTUNATE THAT THEY ARE SO HIGH AND I DON’T BELIEVE THEY ARE JUSTIFIED. I WAS TOLD THEY ARE DUE TO MARKETING COSTS. IF VANGUARD CAN CHARGE .25% I THINK THE SRI FUNDS CAN DO BETTER AND THEY ABSOLUTELY SHOULD DROP THEIR LOADS. HIGH FEES ARE ONE OF THE MAIN FREASONS PEOPLE SHY AWAY FROM SRI INVESTMENTS. THE NEW DOMINA EUROPEAN FUND FOR EXAMPLE, COSTS SOMETHING LIKE 1.59% WHILE A SIMILAR ETF FUND RUNS 60% WHICH IS COVERED BY ITS 1.60% YIELD.

ITS HARD OT BE VIRTUOUS WHEN YOU’RE LOOKING AT SUCH DRAMATIC DIFFERENCES.

GETTING EVERYTHING OFF MY CHEST WHEN IS SRI GOING TO EVLAUTE MANY MORE FOREIGH COMPANIES SO AS TO OPEN UP ASIAN AND LATIN MARKETS TO SRI INVESTORS?

I’m very happy there’s a SRI movement… I and my clients do benefit from their research. It’s a classic case where the benefits to society are paid for by a few individuals, like signing up for a green energy program. I don’t think an individual investor gets enough from SRI funds to justify the cost, but society as a whole often does. As these funds gow and are able to spread the costs over more investors, I hope they will be able to spread their research and advocacy costs over more assets.

However, there are many international advocacy groups which have the benefit of charitable status which do pretty much the same sort of work. Amnesty International does this, and there is no reason why an investment advisor like myself cannot use them as a research/advocacy arm, for a tax deductible contribution or no cost at all if I so choose. Another great example is the Carbon Disclosure Project. I do have to spend a lot of time reading and compiling all this available information, but the costs are still lower than many SRI funds, and I have considerably less under management.

My complaint, basically, is with mutual funds in general rather than SRI funds in particular. Back in the day of high brokerage transaction costs, this structure made sense for aggregating costs among investors. But with individual transaction fees often below .1% per trade (when they used to be as much as 3% or more 20 years ago,) the mutual fund (with the exception of giant index funds like Vanguard, which does not do SRI, unfortunately) has mostly outlived its usefulness.

If you see a fund you like, you’re usually better off by getting a perspectus and mimicing its holdings buy buying individual stocks. The exception to this is for small accounts, but what constitutes a “small” account is getting smaller and smaller by the year. These days, I’d say it’s anything less than $25,000. If you find a good “60 free trades for opening a brokerage account” type offer, you may even be able to do it with $25K…. and if you want advocacy, then you can always make a contribution to a non-profit you believe in.

On Calvert and other socially responsible funds, I think it’s very important to invest with your values, but does it have to cost so much? Most Calvert funds have expense ratios well over 1%. I understand that it would be a conflict of interest for you to directly own the stock of companies you cover. That can easily amount to several thousand $ per year over a social ETF such as KLD. True, KLD does not engage in the activism you describe at Calvert, but it seems like a lot of money out of your tax-advantaged account, when instead you could be making a tax-deductible contribution to a charity of your choice (or keeping it to fund your retirement.)

I have clients who used to be in social mutual funds who I am able to provide customized investment management in individual environmentally responsible (I tend to focus on just one aspect of social responsibility) companies for less money than they had been previously paying in expenses, all because of the high fees socially responsible mutual funds tend to charge.